Key Highlights
- On the back of the economy contracting in Q1 2024, the IMF revised projected growth for 2024 marginally from 1% to 0.9%.
- Energy and logistics limitations, weak domestic demand and a constrained global landscape will detract from growth.
- The Rand gained on the back of reduced political uncertainty and market speculation for US interest rate cuts. However, Rand strength was limited due to the possibility of rate cuts domestically.
- The trade surplus widened to ZAR20.1 billion in May from a revised ZAR9.7 billion in April. Looking ahead, the surplus trend in the trade balance could be sustained through 2024.
- Headline inflation eased to 5.1% YoY in June from 5.2% in May (close to SARBs upper target band for inflation of 6%).
- The SARB sees the inflation outlook improving modestly, although, upside risks to inflation remain.
- In July, the SARBs MPC left the repo rate unchanged at 8.25%. The decision was split, with 2 of the 6 members favouring a rate cut.
